New Build or Existing Home: Which One Is Right for You?
Homebuyers today are facing a huge dilemma. There simply aren’t enough homes for sale.1 Nationwide, there were 1.27 million active listings in September, down 13% from the previous year. According to the National Association of Realtors, that’s about 2.4 months of inventory, which is far less than the six months that is generally needed to strike a healthy balance between supply and demand.2 Given the limited number of available properties, if you’re a buyer in today’s market, you may need to expand your search to include both new construction and resale homes. But it can feel a little like comparing apples to oranges. Let’s take a closer look at some of the factors you should take into account when choosing between a new build or an existing home. TIMEFRAME How quickly do you want (or need) to move into your next home? Your timeframe can be a determining factor when it comes to choosing between a new build or resale. New BuildIf you opt for new construction, you may be surprised by how long you have to wait to get the keys to your new digs. Currently, many home builders are dealing with unique challenges brought on by the COVID-19 pandemic, including rising costs, labor and material shortages, and shipping delays. While historically it took around five to six months to build a home, many builders are now reporting construction timelines closer to a year or more.3 These issues have led some builders to cancel contracts or raise the price on unsuspecting homebuyers long after agreements were signed. Unfortunately, this scenario can throw a major wrench in your moving plans and significantly delay your timeline. To minimize these types of surprises, it’s crucial to have a real estate agent represent you in a new home purchase. We can help negotiate better contract terms and advise you about the potential risks involved. Existing HomeIf you're in a hurry to move into your next residence, then you may want to stick to shopping for an existing home. You can typically move into a resale home as soon as you've closed the deal. The average time it takes to close a home purchase is around 51 days, but it can vary based on loan type and market activity.4 If you need to move even sooner, it’s sometimes possible to close faster, especially if you’re a cash buyer. In fact, many sellers prefer a quick closing, so it can give you an advantage in a competitive market. LOCATION From commute to construction to amenities, there’s a lot to consider when choosing your next neighborhood. New BuildWith a brand-new home, you're more likely to move into a neighborhood that's located on the edge of town and is still undergoing development.5 This could mean a longer commute and ongoing construction for some time. However, new developments can also offer a lot of amenities that appeal to modern homebuyers. Water features, hike-and-bike trails, tot lots, and dog parks are just a few of the enhancements we’re seeing pop up in master-planned communities across the country. And some feature new schools and their own urban-like centers with restaurants, retail, and office space.6 Existing HomeAn existing home is more likely to be located close to town in a neighborhood with mature trees, established schools, and a deeply-rooted community. As a result, you may find the neighborhood's trajectory to be more predictable than an up-and-coming area. But the amenities may be lacking and the infrastructure dated when compared to newer communities. And while some homebuyers love the charm and eclectic feel of an older neighborhood, others prefer the sleek and cohesive look of a newer development. MAINTENANCE Are you a DIY enthusiast, or do you prefer a low-maintenance lifestyle? Set realistic expectations about how much time, effort, and money you want to devote to maintaining your next home. New BuildWhen you build a home, everything is brand new. Therefore, in the first few years at least, you can expect less required maintenance and repairs. A 2019 survey found that millennials' homebuying regrets often came down to maintenance issues, rather than other concerns.7 So if you would rather spend your weekends exploring your new neighborhood than fixing a leaky faucet, you may be happier buying a turnkey build. That doesn't mean, though, that a new home will be entirely maintenance-free. In fact, depending on the builder, you could find yourself repairing more than you expected. Some home builders have reputations for shoddy construction and subpar materials, so it's important to choose one with a solid reputation. We can help you identify the quality builders in our area. Existing HomeNo matter how good a deal you got when you purchased it, you could come to regret buying an older home if it costs you heavily in unexpected maintenance and repairs. According to HomeAdvisor's yearly True Cost report, home renovations have grown more expensive in recent years. For example, installing a new HVAC system could cost you $5,371 on average. And you can expect to pay nearly double that amount ($9,375) for a new roof.8 Fortunately, there are ways to prepare for these large expenditures. We always recommend that our buyers hire a certified home inspector, whether they buy a new or existing home. Once we have the inspector’s report, we can negotiate with the seller on your behalf for reasonable repairs or concessions. ENVIRONMENTAL IMPACT On a quest for greener living? If so, there are several factors to consider when deciding on your next home. New BuildThere’s a growing demand for energy-efficient housing, and many builders are rising to the challenge. Nearly 1 in 4 homes built in 2020 received a HERS (Home Energy Rating System) Index Rating by the Residential Energy Services Network. A HERS rating provides an index score that compares the newly-built home to those that were standard in 2006. The more energy-efficient the home is, the lower the score it receives.11 The average home rated in 2020 was 42% more efficient than those built in 2006 and 72% more efficient than a typical home built in the 1970s.11 So if energy efficiency is a top priority, a new home with a low HERS rating may be a good choice. You can also look for one that’s ENERGY STAR Certified, which means it meets a series of strict efficiency guidelines set by the Environmental Protection Agency. In 2020, only 7.9% of homes built in the U.S. received this designation.12 Existing HomeOf course, a basic tenant of sustainable living is: reduce, reuse, recycle. And since a resale home already exists, it automatically comes with a lower carbon footprint. Research has also shown that remodeling or retrofitting an older home is often greener than building one from scratch.13 With some energy-conservation effort and strategic upgrades, environmentally-conscious consumers can feel good about buying an existing home, as well. DESIGN Open floor plan? Kitchen island? High ceilings? Must-have design features could drive your decision to build or buy resale. New BuildWith a new home, you can bet that everything will look shiny and perfect when you move in. Builders tend to put a lot of emphasis on visual details and follow the latest design trends. For example, newly-built homes are likely to feature an open floor plan, central kitchen island, and 9+ foot ceilings, which are must-haves for many modern buyers. They are also unlikely to feature carpet on the main level or laminate countertops, both of which have lost mass appeal.14 However, some buyers complain of the cookie-cutter feel of new homes since they are often built with a similar aesthetic. That doesn't mean, though, that you can't incorporate your own style. We can help you negotiate custom features and upgrades to personalize the space and make it feel like your own. Existing HomeIn some of the most coveted neighborhoods, an older home with classic styling and character can be highly sought after. But unless the previous homeowners have invested in tasteful updates, an existing home is also more likely to look dated. While some buyers prefer the traditional look and character of an older home, others crave something more modern. If that’s the case, we can help you find a resale home that leaves enough room in your budget to renovate it to your liking. WHICHEVER PATH YOU CHOOSE, WE CAN HELP When it comes to choosing between a new build or an existing home, there’s no one-size-fits-all answer. There are numerous factors to consider, and you may have to make some compromises along the way. But the homebuying process doesn’t have to feel overwhelming. We’re here to help. And in many cases, our homebuyer guidance and expertise are available at no cost to you! That’s because the home seller or home builder may compensate us with a commission at closing. Some new-construction homebuyers make the mistake of visiting a builder’s sales office or even purchasing a home without their own real estate representative. But keep in mind, the builder’s agent or “sales consultant” has their best interests in mind—not yours. We are knowledgeable about both the new construction and resale home options in our area, and we can help you make an informed decision, negotiate a fair price, and avoid mistakes that can cost you time and money. So give us a call today to schedule a free, no-obligation consultation—and let’s start searching for your next home! Sources: Reuters -https://www.reuters.com/world/us/us-existing-home-sales-fall-august-inventory-declines-2021-09-22/ National Association of Realtors -https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september KFVS 12 -https://www.kfvs12.com/2021/09/22/covid-19-pandemic-affects-delivery-rate-building-materials/ Rocket Mortgage -https://www.rocketmortgage.com/learn/time-to-close-on-a-house Real Assets Adviser -https://irei.com/publications/article/master-planned-communities-changing-u-s-housing-trends-favor-investors-can-benefit/ Builder Online -https://www.builderonline.com/land/development/5-master-plan-trends-home-buyers-gravitate-toward-today_o Bankrate -https://www.bankrate.com/real-estate/homebuyer-regret-survey-may-2021/ Home Advisor -https://www.homeadvisor.com/r/true-cost-report/ Roofing Calculator -https://roofingcalculator.com/news/how-long-do-roofs-last Plumbing and Mechanical Engineer -https://www.pmengineer.com/articles/94873 National Association of Home Builders -https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/ EnergyStar -https://www.energystar.gov/newhomes/energy_star_certified_new_homes_market_share Advanced Materials Research - https://www.researchgate.net/publication/271358381_Comparative_Study_of_New_Construction_and_Renovation_Project_Based_on_Carbon_Emission National Association of Home Builders -https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/
Shut Down Home Intruders With These 7 Safety Strategies
According to the FBI, more than one million burglaries are committed in the United States each year, with victims suffering an estimated $3 billion in combined property losses.1 Fortunately, there are some proven tactics you can use to decrease your likelihood of a home invasion. Most burglars won’t go to extreme lengths to enter a residence. They are looking for easy access with minimal risk. A monitored security system can be an effective deterrent—homes without one are 300% more likely to be burglarized—but it isn’t the only way to protect your property.2 The strategies below can help to maximize your home’s security and minimize your chances of being targeted by intruders. Thinking about listing your home? We have some additional recommendations for you. Contact us to find out the procedures we use to keep our clients and their property safe and secure during the buying and selling process. 1. Check Your Doors and Windows According to home security company ADT, the most common entry point for a burglar is an unlocked front door (34%) followed by a first-floor window (23%) or back door (22%).3 So securing these points of entry is essential. Evaluate the condition of your doors and locks. A steel door is generally considered the strongest, but many homeowners prefer the look of wood. Whatever material you choose, make sure it has a solid core and pair it with a Grade 1 or 2 deadbolt lock with a reinforced strike plate.4 Add window locks and security film. Aftermarket window locks are an easy and inexpensive upgrade that can provide an additional layer of protection for your home. Choose a lock that is compatible with your window frame material and a style that is appropriate for the window type. And consider using a specialty film on windows that are adjacent to a door. Security film holds shattered glass in place, making the windows more difficult to penetrate.5 2. Landscape for Security When it comes to outdoor landscaping, many of us think about maintenance and curb appeal. But the choices we make can impact our home’s security, as well. Thieves target homes that they can enter and exit without being detected. Here are a few tweaks that can make your property less appealing to potential intruders. Increase visibility from the street. A privacy hedge may keep out nosy neighbors, but it can also welcome thieves—so trim overgrown trees and shrubs that obstruct the view of your property. According to police officers, they offer an ideal environment for criminals to hide.6 Place thorny bushes and noisy gravel below windows. Don’t eliminate shrubbery altogether, though. Certain hedges can actually offer a deterrent to robbers. Plant thorny rose bushes or sharp-leaved holly beneath your first-story windows for both beauty and protection. Add some loose gravel that crunches when disturbed. 3. Light Your Exterior When it’s dark outside, criminals don’t need to rely on overgrown shrubbery to hide. Luckily, a well-designed outdoor lighting system can make your home both safer and more attractive. Install landscape lighting. Eliminate pockets of darkness around your yard and home’s perimeter with strategically placed outdoor lights. Use a combination of flood, spot, well, and pathway lights to add interest and highlight natural and architectural details. Use motion-activated security lights to startle intruders. The soft glow of landscape lighting isn’t always enough to dissuade a determined intruder. But a motion-activated security light may stop him in his tracks. And if you choose a Wi-Fi connected smart version, you can receive notifications on your phone when there’s movement on your property. 4. Make It Look Like You’re Home Motion-activated lights aren’t the only way to make an intruder think you’re at home. New technology has made it increasingly possible to monitor your home while you’re away. This is especially important since most burglaries take place on weekdays between 10 am and 3 pm, when many of us are at work or school.2 Turn on your TV and leave a car in the driveway. A survey of convicted burglars revealed that the majority avoid breaking into homes if they can hear a television or if there’s a vehicle parked in the driveway.7 If you’re away from home, try connecting your TV to a timer or smart plug. And when you travel, leave your car out or ask a neighbor to park theirs in your driveway. Install a video doorbell. In that same survey, every respondent said they would knock or ring the doorbell before breaking into a home. A video doorbell not only alerts you to the presence of a visitor, it also enables you to see, hear, and talk with them remotely from your smartphone—so they’ll never know you’re gone. 5. Keep Valuables Out of Sight Few home invasions are conducted by criminal masterminds. In fact, a survey of convicted offenders found that only 12% planned their robberies in advance, while the majority acted spontaneously.8 That’s one of the reasons security experts caution against placing valuables where they are visible from the outside.9 Check sightlines from your doors and windows. Don’t tempt robbers with a clear view of the most commonly stolen items, which are cash (think purses and wallets), jewelry, electronics, firearms, and drugs (both illegal and prescription).6 Take a walk around your property to make sure none of these items are easily visible. Secure valuables in a safe. Consider the possessions that are on display inside your home, as well. It’s always a good idea to lock up firearms, sensitive documents, and expensive or irreplaceable items when you have housekeepers or other service providers on your property. 6. Highlight Your Security Measures While it’s prudent to hide your valuables, it’s equally important to advertise your home’s security features. In surveys, convicted burglars admit to avoiding homes with obvious protective measures in place.7,8 Install outdoor cameras. Security cameras are the most common home protection device and for good reason.10 Not only do they help prevent crime (burglars are known to avoid them), they can offer peace of mind for homeowners who want to sneak a peek at their property while away.11 And if you do experience a break-in, security camera footage can help police identify your intruder. Post warning signs. Security system placards and beware-of-dog signs are also shown to be effective deterrents.8 Of course, you should back up your threats with a noisy alarm and loud barking dog for maximum impact. 7. Limit What You Share on Social Media Social media platforms can be a great way to stay connected with friends and family, but it’s easy to reveal more than you’ve intended. Be thoughtful about what you’re posting—and who has access. Delay posting photos or travel updates. It can be tempting to upload a concert selfie or pictures from your beach vacation. But these types of photos scream: “My house is unoccupied!” Try to wait until you’ve returned home to share the photos on social media. Set privacy restrictions on your accounts. Think twice about connecting with strangers or casual acquaintances on social media. If you enjoy sharing family updates and personal photos, it’s safer to limit your followers to those you truly know and trust. YOUR HOME IS SAFE WITH US We take home security seriously. That’s why we have screening procedures in place to keep our clients and their homes safe when they are for sale. We also remind our buyers to change the locks before they move into their new homes and provide referrals to locksmiths and home security companies that can help. To learn more about our procedures and how you can stay safe during the buying and selling process, contact us to schedule a free consultation! Sources: Federal Bureau of Investigation -https://ucr.fbi.gov/crime-in-the-u.s/2019/crime-in-the-u.s.-2019/topic-pages/burglary Bankrate -https://www.bankrate.com/insurance/homeowners-insurance/house-burglary-statistics/ ADT -https://www.adt.com/resources/how-do-burglars-break-into-houses National Crime Prevention Council -https://www.ncpc.org/wp-content/uploads/2017/11/locking-your-home-reva-1-pdf.pdf SafeWise -https://www.safewise.com/blog/10-simple-ways-to-secure-your-new-home/ Forbes -https://www.forbes.com/sites/houzz/2014/03/20/how-your-landscaping-can-keep-burglars-away/?sh=2a8addf27429 KGW News -https://www.kgw.com/article/news/investigations/86-burglars-say-how-they-break-into-homes/283-344213396 Science Daily -https://www.sciencedaily.com/releases/2013/05/130516160916.htm org -https://www.security.org/home-security-systems/home-invasion-protection/ SafeWise -https://www.safewise.com/resources/security-stats-facts/ The Guardian -https://www.theguardian.com/business/2017/aug/18/former-burglars-barking-dogs-cctv-best-deterrent
5 Factors That Reveal Where The Real Estate Market Is Really Headed
It’s the old supply-and-demand predicament: Home sales in the U.S. Real Estate Market continue at a torrid pace, but the availability of listings remains limited. Buoyed by historically low mortgage rates, buyers keep shopping for homes, reducing the available inventory and sparking a rise in home prices across the country. News website The Atlantic summarized the sizzling home market this way: “Pick a housing statistic at random, and it’s probably setting an all-time record. Home prices: record high. Inventory: record low. Percentage of homes selling above asking price: record high. Average time on market: record low.”¹ Meanwhile, homebuilders are contending with an increase in material costs and a shortage of labor. These issues come amid an ongoing shortage of housing. A study commissioned by the National Association of Realtors found the U.S. is coping with a deficit of about 2 million single-family homes and about 3.5 million other housing units.² So what can we expect from U.S. real estate? Here are five factors that illustrate where the housing market is today and is likely heading tomorrow. ROCK-BOTTOM MORTGAGE RATES TO GRADUALLY RISE Low interest rates continue to fuel demand from homebuyers. Some experts believe mortgage rates will creep up later this year, but they expect rates to remain near historic lows.3 However, the Federal Reserve signaled in mid-June that it may institute two interest rate hikes as soon as 2023, which could then trigger a more substantial uptick in mortgage rates.4 In June, the Mortgage Bankers Association reported that 2020 closed with the average rate for a 30-year, fixed-rate mortgage sitting at 2.8%. But the association anticipates the average rate climbing to 3.5% at the end of 2021 and 4.2% by the end of 2022.5 “As the economy progresses and inflation remains elevated, we expect that rates will continue to gradually rise in the second half of the year,” said Sam Khater, chief economist at Freddie Mac.6 What does it mean for you? You’ve likely heard the old saying about “striking while the iron is hot.” Well, that phrase applies to the current environment for mortgage rates. It’s impossible to predict with certainty when mortgage rates will rise or fall. So, when mortgage rates are at or near historic lows (as they are today), you should seriously consider taking advantage of those rates to borrow money for a home purchase or to refinance your existing mortgage. HOME PRICES EXPECTED TO KEEP CLIMBING Low mortgage rates are sparking interest among homebuyers, but some are running into affordability issues. In June, the national median list price for a home reached an all-time high of $385,000, up 12.7% on a year-over-year basis.7 And according to the Home Buying Institute, various reports and forecasts indicate home prices will keep climbing throughout 2021 and into 2022.8 While this may be welcome news for homeowners, high prices are pushing homeownership out of reach for a growing number of first-time buyers. In a recent CoreLogic survey, 82% of respondents listed housing affordability as a key problem.9 “Younger and first-time buyers, including younger millennials, are faced with the challenge of having sufficient savings for a down payment, closing costs and cash reserves,” said Frank Martell, President and CEO of CoreLogic. “As we look to the balance of 2021, we expect price rises to continue which could very well push prospective buyers out of the market in many areas and slow home price growth over the next year.”9 What does it mean for you? If you’re a buyer waiting on the sidelines for prices to drop, you may want to reconsider. While the pace of appreciation should taper off, home prices are expected to continue climbing. And rising mortgage rates will only make a home purchase more expensive. SINGLE-FAMILY HOME SALES REMAIN ROBUST While record-high prices are sidelining some buyers, the impressive pace of single-family home sales marches on. Single-family home sales are down from their peak in October 2020 yet are still above the overall level last year. In May 2021, 5.8 million existing single-family homes were sold in the U.S. That’s a 45% increase over the 4 million homes sold in May 2020.10 However, home sales saw a 0.9% dip in May 2021 compared with the previous month, the National Association of Realtors says. That was the fourth straight month for a decline in home sales. The number of home sales has slid recently because of rising prices coupled with a shortage of available homes amid intense demand.10 Fannie Mae expects total home sales to tick up slightly in the fourth quarter and finish the year up 3.8% over last year. They also forecast a slight decline of 2.2% in sales volume in 2022.11 What does it mean for you? The market for single-family home sales remains quite active. As a result, if you’re a homeowner, you may want to ponder whether to sell now, even if you hadn’t necessarily been thinking about doing so. With demand high and inventory low, your home could fetch an eye-popping price. LACK OF INVENTORY STILL CONSTRAINS THE HOME MARKET According to the National Association of Realtors, in May there were 1.23 million previously owned homes on the market, down 20.6% from the same time last year.10 This translates to a 2.5-month supply of homes, which is well below the 6 months of inventory typically seen in a balanced market.10,12 According to the Realtors group, this lack of inventory translates into tougher searches for buyers and contributes to a rise in prices.10 “Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom. The inventory of previously owned homes is near record lows,” according to Reuters.13 What does it mean for you? If you’re thinking of selling your home, now may be the right time to do it. Across the country, it’s a seller’s market, meaning demand is outpacing supply. That supply-and-demand imbalance puts sellers in a great position to sell their homes at a premium price. The May 2021 Realtors Confidence Index from the National Association of Realtors found the average home that was sold attracted five offers, and the association says nearly half of homes are selling above list price.14,15 CONSTRUCTION OF SINGLE-FAMILY HOMES SEES SLIGHT UPTICK Frustrated buyers may soon find some relief, however, from an increase in new construction. Economists forecast that 1.1 million new houses will be started in 2021, compared with a predicted 940,000 units just six months ago, with 1.2 million new starts predicted for 2022 and 2023, according to the Urban Land Institute.16 Amid the rise in home construction, builders are coping with rising costs for materials. In April, the National Association of Home Builders estimated that a surge in lumber prices over the previous year had led to $35,872 being tacked onto the cost of an average new single-family home.17 “Shortages of materials and labor have builders struggling to increase production of new homes, though the demand remains strong,” Robert Frick, corporate economist at Navy Federal Credit Union, told the Reuters news service. “Potential homebuyers should expect tight inventories and rising prices for both new and existing homes for the foreseeable future.”18 Builders (and buyers) did receive some good news in June, though: Lumber prices are coming down—although likely to remain above pre-pandemic levels for the foreseeable future.19 What does it mean for you? Given the issues affecting the new-home market, it may make sense to widen your home search to include both new and existing homes. Your brand-new dream home may not be available, but you might be able to find an existing home that lives up to your vision. Keep in mind that we can help you find either a new or existing home and can advocate for you to ensure you get the best deal possible. ARE YOU THINKING OF BUYING OR SELLING? If you’re in the market for a home, you’re ready to sell your house or you’ve simply been wondering whether you should sell, you definitely could benefit from an expert to help you navigate the sizzling hot real estate market. Let’s set up a free consultation to discuss your situation. We can help you figure out your options and come up with a plan to capitalize on the value of your current property or to find your ideal next home. Sources: The Atlantic -https://www.theatlantic.com/ideas/archive/2021/05/us-housing-market-records/619029/ Wall Street Journal - https://www.wsj.com/articles/u-s-housing-market-needs-5-5-million-more-units-says-new-report-11623835800 Time -https://time.com/nextadvisor/mortgages/mortgage-predictions-2021/ Bankrate -https://www.bankrate.com/banking/federal-reserve/fomc-meeting-recap-june-2021/ Mortgage Bankers Association - https://www.mba.org/news-research-and-resources/research-and-economics/forecasts-and-commentary/mortgage-finance-forecast-archives Associated Press News -https://apnews.com/press-release/globe-newswire/mortgages-mortgage-rates-business-0fc0360d0f4af0c988504385fa2794c3 Realtor.com -https://www.realtor.com/research/june-2021-data/ Home Buying Institute -http://www.homebuyinginstitute.com/news/home-prices-will-keep-rising-through-2021/ DS News -https://dsnews.com/daily-dose/07-06-2021/record-high-home-prices-intensify-affordability-challenges National Association of Realtors -https://www.nar.realtor/newsroom/existing-home-sales-experience-slight-skid-of-0-9-in-may Fannie Mae -https://www.fanniemae.com/media/40561/display Real Estate Center at Texas A&M University -https://assets.recenter.tamu.edu/documents/articles/2046-7.pdf Reuters -https://www.reuters.com/world/us/us-housing-starts-rise-less-than-expected-may-building-permits-fall-2021-06-16/ National Association of Realtors - https://www.nar.realtor/research-and-statistics/research-reports/realtors-confidence-index Realtor magazine -https://magazine.realtor/daily-news/2021/05/17/report-half-of-homes-sell-above-list-price
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